BULGARIAUPDATED | 11| 2014

2014 | 2020EU BUDGETS

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Global Europe

Administration

Compensation

Security & Citizenship

€ 199.828

€ 959.988in current prices: € 1.082.555

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The five European Structural and Investment Funds;

| The European Regional Development Fund

| The European Social Fund

| The Cohesion Fund

| The European Maritime and Fisheries Fund

| The European Agricultural Fund for Rural Development

ESI FUNDSTHE 5

| EU Member States are required to draw up and implement

strategic plans with investment priorities covering the five ESI

Funds.

| These Partnership Agreements (PAs) are negotiated between the

European Commission and national authorities, following their

consultation of various levels of governance, representatives from

interest groups, civil society and local

and regional representatives.

AGREEMENTSPARTNERSHIP

| Under Bulgaria's regional aid map, the entire territory of Bulgaria will be

eligible for regional aid under Article 107(3)(a) of the Treaty on the

Functioning of the European Union (TFEU) that allows Member States to

grant aid in areas with a standard of living below EU average or high

unemployment.

| The map also defines the maximum aid intensities for large

companies carrying out projects in the country at 50% of the total

investment cost in five of Bulgaria's regions and at 25% in the

Yugozapaden region.

| The map will be in force from 01.07.2014 to 31.12.2020.

AID PERCENTAGESMAXIMUM

| The proposed maximum aid intensity is for projects with eligible

expenditure below €50 million.

| These percentages can be increased by 20 percentage points for

investments carried out by small and 10 percentage points by medium

sized enterprises.

| Five regions in Bulgaria have a GDP per capita lower than 45% of the EU

average and one - the Yugozapaden region - between 60% and 75% of the

EU average.

AID PERCENTAGESMAXIMUM

| Under the regional aid guidelines 2014-20, areas with a GDP per capita

below 75% of the EU average are eligible in priority for regional investment

aid, as the main purpose of regional aid is to foster the development of the

less advantaged regions of Europe.

| In comparison to the previous map, the overall aid intensity remains the

same (50%) for all Bulgarian regions except for the Yugozapaden region

where it drops to 25%, in line with the guidelines‘ principle to prioritise

providing support to the most disadvantaged regions.

| The population coverage remains the same.

AID PERCENTAGESMAXIMUM

CU

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STotal number

of OP s submitted

per country

Countries have

their OP s

adopted:21 OP >Denmark

1 OP >Lithuania

| Partnership Agreement Adopted 07 – 08 – 2014

| 7 Operational Programme’s submitted

| Adoption of OP’s by European commission in Q4 2014

| Exp.1st grant calls Q1 2015 for funding priorities related to OP’s

OPs should be submitted by Member States within 3 months following the

submission of the Partnership Agreement.

The Commission makes observations within 3 months and adopts the OP

no later than 6 months from the date of its submission.

PLANNING

| The funding priorities are based on analyses of regional disparities,

development needs and the potential for growth of Bulgaria.

| The identified areas of interventions for development of Bulgaria in the

coming years, the National Development Programme, National Reform

Programme, National Spatial Development Concept, as well as the

European Council Recommendations for Bulgaria.

|Bulgaria has chosen to finance investments under all 11 thematic

objectives defined in the Regulations.

PRIORITIESFUNDING

ESI funds will assist Bulgaria in achieving its national EU2020 targets and flagshipinitiatives:

| R&D expenditure in relation to GDP is to increase to 1.5% (2020), increasing to 31.10% of the enterprises realized innovation activities;| The share of RES energy in gross final energy consumption to rise to 16 % (2020)| Reducing the number of people living in poverty by 260 000 until 2020;and the share of energy from renewable sources in transport to reach 10%| Higher energy efficiency by 25% until 2020;

RESULTSEXPECTED

| Employment among the population aged 20 to 64 years - 76% for 2020

(63.5% in 2013): reduced level of unemployed youths aged 15-29 to 7% in

2020; achieving employment rate among older persons (55–64 years of

age) of 53% in 2020

| Share of students dropping out of the educational system to decrease to

11% for 2020 (12.5 % in 2013)

| Share of persons aged 30-34 with completed higher or equivalent

education: 36% for 2020 (29.4 % in 2013);

| Reduced time for providing administrative services with 50% compared to

2013.

RESULTSEXPECTED

| Around EUR 7.57 billion has been allocated to Bulgaria for Cohesion

policy for the programming period 2014-2020: EUR 3.57 billion ERDF,

EUR 2.28 billion Cohesion Fund, EUR 1.52 billion ESF (of which EUR

55.2 million will be added to the), EUR 55.2 million for the Youth

Employment Initiative specific allocation, and EUR 165.7 million for

territorial cooperation.

| The amounts dedicated to social inclusion and fighting poverty are EUR

407 million (27% of the total ESF budget).

ALLOCATIONSFINANCIAL

| EUR 2.34 billion will be devoted to development of the agri-food sector

and rural areas from the EAFRD. The allocation for the EMFF amounts to

some EUR 88 million.

Significant attention is given to the territorial dimension of interventions in

particular in the area of urban development and access to public services.

Around 20% of the ERDF allocation may be invested in sustainable urban

development actions implemented in Bulgaria mainly through Integrated

Territorial Investments in several urban centres and their functional areas.

ALLOCATIONSFINANCIAL

Cohesion policy will be delivered by 7 operational programmes:

| 2 national OPs co-financed by ERDF (Operational programme “Regions in Growth”, Operational programme “Innovations and Competitiveness);| 2 national OPs co-financed by ERDF and CF (OP Environment, Operational programme “Transport and transport infrastructure”);| 1 national OP co-financed by ESF and ERDF (Operational programme“Science and education for smart growth”);| 2 national OP co-financed by ESF (OP "Good Governance" OP "Human Resources Development".

Moreover, there is a Rural Development Programme (financed by EAFRD) anda Maritime and Fisheries programme (financed by EMFF).

ARCHITECTUREPROGRAMME

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FUNDING PRIORITIES

THEMATIC OBJECTIVEFOR EACH FUND

INDICATIVE ALLOCATIONOF SUPPORT BY

ERDF ESF CF EAFRD EMFF TOTAL

1. Strengthening research, technological development and innovation

11.38% - - 0.45% - 4.40%

2. Enhancing access to, and use and quality of, information and communication technologies

6.62% - - 5.00% - 3.72%

3 Enhancing the competitiveness of small and medium-sized enterprises, the agricultural sector (for the EAFRD) and the fisheries and aquaculture sector (for the EMFF)

16.56% - - 15.60% 50.00% 10.82%

4. Supporting the shift towards a low-carbon economy in all sectors

14.95% - - 10.10% 6.00% 8.21%

5. Promoting climate change adaptation, risk prevention and management

2.55% - - 7.70% - 2.85%

6. Protecting the environment and promoting resource efficiency

8.58% - 49.76% 40.50% 33.00% 24.95%

7. Promoting sustainable transport and removing bottlenecks in key network infrastructures

8.66% - 50.24% - - 14.65%

8. Promoting employment and supporting labour mobility

- 28.47% - 2.50% 5.00% 4.56%

9. Promoting social inclusion and combating poverty

12.06% 20.99% - 14.00% - 10.84%

10. Investing in education, skills and lifelong learning

12.31% 33.76% - 0.15% - 9.26%

11. Enhancing institutional capacity and an efficient public administration

- 12.58% - - - 1.71%

Technical Assistance 6.33% 4.20% - 4.00% 6.00% 4.03%

TOTAL 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Programme title ESI Fund

Operational programme “Regions in Growth” ERDF

Operational programme “Human Resources Development” ESF

Operational programme “Science and education for smart growth”

ESF / ERDF

Operational programme “Innovations and Competitiveness”

ERDF

Operational programme “Transport and transport infrastructure”

CF/ ERDF

Operational programme “Environment” CF/ ERDF

Operational programme “Good Governance” ESF/ ERDF

Maritime and Fisheries Programme

EMFF

Rural Development Programme

EAFRD

OPERATIONAL PROGRAMSBUDGET BREAKDOWN

THEMATIC OBJECTIVE& BY FUNDALLOCATION BROKEN DOWN BY